Retail Person Of The Year: Mark Parker, Nike CEO

Walter Loeb
, ContributorI cover major developments in the retail industry.Opinions expressed by Forbes Contributors are their own.

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Mark Parker, chairman, president and CEO of Nike, is a real disruptor in retailing. His imaginative and innovative actions make him a true leader and visionary, so he is my choice as the "Person of the Year." He succeeded Phil Knight, cofounder of Nike, as chairman in 2016 and has initiated many exciting steps since then that will change the dynamics of his company as well as the growth prospects of many of his retail partners.

Parker, 62, joined Nike in 1979 as a footwear designer in its research and design facility after graduating with a BA in Political Science from Penn State in 1977. He became Vice President in charge of development in 1987, General Manager in 1992, and Vice President of Global Footwear in 1998. He was named co-president of the Nike brand in March 2001 and in 2006 was appointed as CEO of the company. The success of Nike in recent years can be traced to that date. Since his appointment as CEO, Nike’s profits have increased 57% and the company’s market capitalization more than doubled. The company now has sales of over $32 Billion. By 2020, Parker has ambitious hopes to boost sales to $50 billion.

Despite his multifaceted duties, he continues to be actively involved in product design and participates as a member of Nike’s HTM team – Hiroshi Fujiwara, Tinker Hatfield and Mark Parker himself – creating limited footwear editions. Special products like athletic shoes Vapor X and Nike Zoom reflect the commitment to innovative design and capture strong customer demand.

On October 25, Parker announced a revolutionary decision. He decided that out of Nike’s global universe of more than 30,000 retail partners, the company would focus on approximately 40 of them. He expects these partners to be able and willing to build a unique and dedicated Nike space in their stores so together they can deliver a more personalized brand experience for customers.

Beyond this extensive wholesale presence, Nike has about 380 owned Nike, Nike Outlet, Converse and Hurley stores throughout the United States. In addition, there are many owned stores in Africa, Asia, Europe and Canada. They will all become more important and part of a strategy to connect more directly with customers. Some of the Nike superstores will undoubtedly serve as prototypes for in-store presentations of Nike apparel and footwear in remaining retail partners.

It is a dramatic strategic shift for the company that may change many other retailers’ vision of the future. Sure, Canadian Goose, Michael Kors and Coach (a.k.a. Tapestry) have announced similar moves of cutting back their retail partner base and concentrating their brands in a new relationship with these customers, and then focusing more on their own direct-to-customer efforts. But, none seem as farreaching.

A recent article in Business of Fashion by Doug Stephens suggests that the coming decade will see a new framework emerging to define the retail landscape. On one hand, there will be a greater number of vertically integrated brands that serve individual customers directly at scale and in a manner that best benefits the brand. He also sees a new class of “experiential merchants” that will use their physical stores and online assets to perfect the consumer experience.

Mark Parker’s latest strategy reflects this future retail world. He is a new era retailer that will elevate the importance of Nike stores and also drive sales for his brand partners. However, his vision is even bigger. He does not plan to focus only on four wall experiences in the future but rather seeks multiple means of creating the best possible brand experience for his customers.

In his letter to shareholders, he speaks about the breadth of change he is initiating. He does not believe in incremental change, but in sustainable innovation as a powerful engine for growth and a catalyst for change – not only for his own business but across industries. Parker is partnering with innovators who help accelerate systemic change at scale. For instance, Nike is partnering with Flex to take a fresh approach to footwear manufacturing. Similarly, the company is using DreamWorks and their technology company NOVA to build a 3D digital design system to transform its product creation process. Finally, with the Ellen MacArthur Foundation, Nike is exploring new business models that keep materials in play through reuse and regeneration.

I think all of this will present a challenge to the industry that could have a positive outcome for customers. Parker’s decision not to sell to many department store companies forces these outlets to find replacements for Nike products. While some may go to Adidas or other integrated footwear and apparel brands, other retailers may be more adventurous and develop relationships with smaller, innovative brands and encourage creativity and new products. Maybe Parker has found a way for the footwear industry to be more creative and innovative, something needed to be competitive.

On a personal note, Mike Parker is married, has three children and collects modern art. Among his possessions are works by Andy Warhol, Sebastian Kruger, Adonna Khare and Sarina Brewer to mention just a few.